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The Ghanaian energy sector has saved $5 billion
- This is in line with the implementation of the ESRP
- The ESRP is in collaboration with the World Bank
The Ghanaian energy sector has saved $5 billion since the implementation of the Energy Sector Recovery Program (ESRP). This Ghanaian Ministry of Finance in collaboration with the World Bank began the implementation of the ESRP in 2019. The program has so far implemented policies necessary to improve the energy sector’s viability. The sector saved the money by the relocation of Karpowership Ghana Company and securing agreements with CENIT Power and Cenpower Generation Company.
Under the program, the government has renegotiated existing Power Purchase Agreements (PPAs). One of such renegotiations includes stopping the payment for energy generated on a Take or Pay basis. The Government will henceforth only make payments to Independent Power Producers (IPPs) for energy consumed on a Take or Pay basis. In a statement released by the Ministry of Finance, the Spokesperson of the Ministry stated that “Government will continue to manage the situation by negotiating more balanced contracts, reducing debt, instituting careful forward planning and proper data-driven analysis, as well as transparent, competitive energy procurement processes to build a resilient, sustainable energy sector for the good of Ghana”.
Ghana’s electricity sector faces the challenges of low funding, inadequate energy generation and liquidity crisis brought on by the debt owed to the Generation Companies (GenCos).
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